Invesco
May 14, 2026
Pairing US and European AAA Rated CLOs to Enhance Income Opportunities
Credit StrategyStructured ProductsRates CreditFinancialsOther
This report explores the benefits of combining US and European AAA-rated CLOs to enhance income and diversification for Asia-based investors. It highlights that USD-hedged European CLOs can offer spread premia and reduced correlation to US assets without sacrificing credit quality.
Key Takeaways
- 1.AAA CLOs historically offer high yields for an investment-grade rating compared to traditional fixed income.
- 2.USD-hedged European AAA CLOs provide returns comparable to US counterparts but with reduced correlation.
- 3.Combining US and European CLOs can improve diversification and risk-adjusted returns.
Table of Contents
- Key takeaways
- Why US AAA CLOs now?
- Strengthen US AAA CLOs with European AAA CLOs
- Why combining US and European AAA CLOs could be compelling for Asia-based investors
- Investment risks
- Important information
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Authors
Derek FinChristopher Crea
Securities
J.P. Morgan CLOIE AAA IndexJ.P. Morgan Euro CLOIE AAA Total Return IndexBloomberg U.S. Aaa Corp Index
Themes
Yield Enhancement in Investment GradeCross-Regional DiversificationFloating Rate Benefits
Regions
North AmericaEuropeAsia PacificUnited States